Concerns Mount Over Foreign Influence in Philippines’ National Grid

Lawmakers in the Philippines have raised alarms about the ownership structure of the National Grid Corporation of the Philippines (NGCP), igniting concerns over foreign influence in the country's critical infrastructure. On January 6, Joey Salceda, chairman of the House Committee on Ways and Means, questioned the NGCP's compliance with foreign ownership laws. These laws restrict foreign investment in public utilities to a maximum of 40%. The NGCP is currently 60% owned by the Filipino-led Synergy Grid of the Philippines (SGP) and 40% by the State Grid Corporation of China (SGCC), with Chinese national Zhu Guangchao serving as chairman.

The issue has sparked debate about operational transparency and the potential for undue foreign influence. Analysts, however, have downplayed the likelihood of a switch in the national grid operator. They argue that despite the concerns, the current structure remains stable. Nonetheless, fears persist about China's potential to wield excessive control over the Philippines' energy supply, including a theoretical "kill switch" that could disrupt power across the archipelago.

Adding to these concerns, lawmakers have pointed to potential violations of foreign ownership laws. SGP's submissions to the Philippine Stock Exchange revealed that foreign shareholders, including those from American, Chinese, Malaysian, and Iranian nationalities, hold stocks accounting for 7.48% of the company's ownership. This revelation has intensified scrutiny over the NGCP's adherence to legal ownership limits.

Another critical issue is the limitation on skill transfers to Filipino engineers. With foreign involvement in the NGCP's operations, there are apprehensions about whether local engineers are receiving adequate opportunities to develop expertise and manage key aspects of the national grid independently.

Moreover, the lack of operational transparency within the NGCP has been highlighted as a vulnerability. Lawmakers argue that without clear insights into operations, the Philippines could be susceptible to undue foreign influence, further complicating matters related to national security and energy independence.